HCM City (VNA)- Southern cities and provinces are ready to switch from the RON92 grade petrolto E5 biofuel starting next year, but concerns remain over its pricing andconsumer preference.

Local authorities andpetrol traders said at a meeting on Saturday they are all set to sell the E5biofuel from January 1, 2018.

Nguyen Phuong Dong, Deputy Directorof the HCM City Department of Industry and Trade, said all 534 petrol stationsin the city will sell E5 bio-fuel on a regular basis next year.

Some of the petrol stationsare prepared to sell from December 15, he said, adding that about 45 percenthave already started selling the E5 biofuel.

“To ensure sufficientsupply of the E5 fuel, the department will inspect all 534 gas stations onDecember 15,” Dong said.

The trading and sale ofRON92 petrol will stop on December 31, 2017 and be replaced by the E5 biofuelon January 1, 2018 under the Prime Mnister’s Announcement 255/TB-VPCP on June6.

According to the Departmentof Science and Technology under the Ministry of Industry and Trade, E5 fuel hascompletely replaced RON92 petrol in four cities and provinces – Da Nang, QuangNam, Quang Ngai and Can Tho.

But authorities in southernlocalities have also said they have encountered some difficulties in switchingfrom RON92 petrol to E5 bio-fuel, particularly product price and consumerpreference.

While sellers are notencouraged by the current price mechanism, consumers are not convinced by theproduct’s quality standards, which have mostly remained undisclosed to thepublic.


Sellers are also concerned that the new product would not be attractive enoughas it is only 1,000-1,200 VND (4.4-5.3 US cents) per litre cheaper than RON95petrol. This might see market demand for RON95 petrol rise strongly, especiallyif consumers’ awareness over the quality of E5 biofuel is not raised.

“Petrol stations in thesouthern region have also raised questions about how they would deal with theremaining amount of RON92 petrol not sold out by January 1, and about how muchfinancing they would get because the input cost for selling E5 fuel is stillhigh,” Dong said.

Across the country, anumber of companies have been prepared to sell the new product on December 15,including Nam Song Hau Trading Investing Petroleum JSC and PetroVietnam OilCorporation.

The Hau Giang-based Nam SongHau Trading Investing Petroleum JSC has three factories with daily capacitiesof 400, 800 and 1,500 cubic metres, four subsidiaries, and 77 petrol stations.

The company will subsidisesellers by purchasing the remaining amount of RON92 fuel at the distributedprice.

Meanwhile, PetroVietnam OilCorp (PV Oil) has completed all preparations for the new product, according togeneral director Cao Hoai Duong.

Duong said that PV Oil hasinvested in maintaining, improving and upgrading its infrastructure to makesure the supply of E5 fuel is sufficient and product quality meets nationalstandards. He estimated the preparation costs for the company at 100 billion VND(4.44 million USD).

Nguyen Minh Toai, Directorof the Can Tho Department of Industry and Trade, acknowledged that the maindifficulties in regular sale of the E5 fuel are consumer awareness and sellers’doubts on input costs.

He said local authoritiesneed to improve consumers’ awareness of E5 bio-fuel and develop proper plans tosupport traders in making the switch.

Deputy Minister of Industryand Trade Hoang Quoc Vuong said at a conference on December 9 that there hasbeen no complaint on the quality of E5 fuel from consumers since it was pilotedin seven provinces and cities in late 2014.

Its quality and safetystandards have been confirmed by the Ministry of Science and Technology, headded.

The deputy minister alsosaid that the Ministries of Finance, and Industry and Trade have been workingon tax rates and selling prices to make E5 more attractive to consumers.

It is important to put E5fuel into use nationwide as it will improve the country’s energy securitysituation, protect the environment and further develop the Vietnamese energyindustry, Vuong said.-VNA